Bihar Board 12th Business Studies Important Questions Long Answer Type Part 3

Bihar Board 12th Business Studies Important Questions Long Answer Type Part 3 are the best resource for students which helps in revision.

Bihar Board 12th Business Studies Important Questions Long Answer Type Part 3

Question 1.
What are the functions of packaging?
Answer:
Functions of Packaging: Packaging is essential because it performs variety of functions such as:
1. Protection: it protects the product from damages which it may suffer in the process of storage and transportation. Appropriate packaging saves the product from sun, rains, moisture, breakage due to handling insects, spoilage, leakage, etc.

For example, airtight containers and packs are used for edible products like chips, biscuits, jams and cola etc. So as a protect them from atmospheric Contact. It enhances the self-life and maintains freshness of the products. Products like television or other appliances need to be protected from damage in transit. Therefore, these are packed in big board cartons with thermocol padding inside.

2. Identification: It enables the customers to identify one product from the other. It is because of identification function that firms develop packages with unique carton shape, colours, size and textures. For example, from the unique bottle of Coke one can easily identify it from others.

3. Convenience: It enhances convenience both for the middlemen and consumer. Middlemen require strong and mobility conveniences and hence demand that packaging should be convenient to store and transport. Customer requires usage convenience and hence demands that packaging should be convenient to use.

4. Promotion: It acts like a silent salesman. In current self-service retailing, an attractive package can attract the attention of customer and can describe product contents and induce him to make a purchase.

5. Innovation: An innovative package enables the marketeer to capture new customer segments. For example, by selling shampoo in small pouches, marketeer could reach the rural or lower income market.

Question 2.
What is the purpose/objective/importance of SEBI?
Answer:
The basic purpose of SEBI is to create an environment to facilitate efficient mobilisation and allocation of resources through the securities markets. It aims to stimulate competition and encourage innovation. This environment includes rules and regulations, institutions and their inter-relationship, instruments, practices, infrastructures and policy framework.

Objectives of SEBI:
The overall objectives of SEBI are to protect the interest of investors and to promote the development of and regulate the securities market.
This may be elaborated as follows:

• To regulate stock exchange and the securities industry to promote their orderly functioning.
• To protect the rights and interest of investors, particularly individual investors and to guide and educate them.
• To prevent trading malpractices and achieve a balance between self regulation by the securities industry and its statutory regulation.
• To regulate and develop a code of conduct and fair practices by intermediaries like brokers, merchant bankers, etc. with a view making them competitive arid professional.

Question 3.
Discuss the functions of SEBI.
Answer:
Keeping in mind the emerging nature of the securities market in India SEBI was entrusted with the twin task of both regulation and development of the securities market.
Regulatory functions:

• Registration of brokers and sub-brokers and other player in the market.
• Registration of collective investment schemes and mutual funds.
• Regulation of stock brokers and portfolio exchanges and marchant bankers.
• Prohibition of fraudulent and unfair trade practices.
• Controlling insider trading and takeover bids and imposing penalties for such practices.
• Calling for information by undertaking inspection, conducting enquiries and audits of stock exchange and intermediaries.
• Levying fee or other charges for carrying out the purposes of the act.

Development functions:

• Investors’ educations
• Training of intermediaries.
• Promoting of fair practices and code of conducts of all stock exchanges.
• Conducting research and publishing information useful to alt market participants.

Question 4.
Define the major differences between selling and marketing.
Or, Define marketing? How is it different from selling? Discuss.
Answer:
Marketing is a total system of interacting business activities designed top on promote, and distribute want satisfying goods and service to present and potential customers.
Difference between Marketing and Selling:

1. Part of the process Vs wider term: Selling is only a Part of the process of marketing and is concerned with promoting and transferring, possession and ownership of goods from the seller to the buyer. Marketing as such wider term consisting of number of activities such as identification of the customer’s needs, fixing prices and persuading the potential buyers to buy the same.

2. Transfer of title Vs satisfying customer needs: The main focus of selling if not affecting transfer of title and possession of goods from sellers to consumers or users’. In contrast, marketing activities put greater thrust on achieving maximum satisfaction of the customer’s need and wants.

3. Profit through maximising sales Vs customer satisfaction: All selling activities are directed at maximising sales and, thereby, the profits of the firm. In other words the emphasis is on profit maximisation through maximisation of sales. Marketing, On the other hand, is concerned with customer satisfaction and thereby increasing profit in the long run.

4. Start and end of the activities: Selling activities start after the product has been developed while marketing activities start much before the product is produced and continue even after the product has been sold.

5. Difference in the Emphasis: In selling the emphasis is on bending the customer according to the product while in marketing, the attempt is to develop the product and other strategies as per the customer needs.

6. Difference in the Strategics: Selling involves efforts like promotion and persuasion while marketing uses integrated marketing efforts involving strategics in respect of product, promotion, pricing and physical distribution.

Question 5.
Discuss the various elements of marketing mix.
Answer:
Elements of Marketing mix: “The set of marketing used to achieve its objectives” or ingredients which accompany marketing in accomplishing its objectives is termed as marketing mix:
1. Product: The product is the most important element in the marketing mix. It is the starting point of all marketing activities. The other marketing efforts will prove useless unless the policies pertaining to a product intended for sale are decided and nature of the product is determined.

2. Price: The price of the product of a firm constitutes, an extremely important element in its marketing mix. Pricing is of a great importance to the producer, seller and the consumer. The term ‘price’ may be defined as the money consideration asked for or offered in exchange for a specified units of a goods or service.
The price mix includes the following:

• Determination of unit price of the market
• Pricing policies and strategies
• Discount rebates and level of margins
• Credit policy and
• Terms of delivery payment.

3. Promotion: Promotion means communication with customers to stimulate them to buy goods. Advertising and personal selling are important tools to promote the sale of products of a firm. The use of promotional activities like contests, displays, free distribution of samples, etc. is also significant to fight competition in the market. Usually a business firm uses more, than one type promotionl tools. Promotion mix is the name given to the combination of methods used in communicating with customers.

4. Physical Distribution or place: This element is concerned with making available the goods to the customers at their places. The goods may be sold through wholesalers and retailers. The firm may also distribute the products through its own retail shops.

Question 6.
Give the meaning and elements of promotion mix.
Answer:
The term ‘promotion mix’ is used to depict to the combination of different kinds of promotional tools used by a firm to advertise and sell its products. The main promotion tools or activities which make up promotion mix are personal selling, advertising, publicity and sales promotion. These are also known as elements of promotion mix and are briefly discussed below:

1. Personal selling: Personal selling is the process of assisting and presenting a prospective buyer to buy a commodity in a face-to-face situation. It involves direct and personal contact between the seller or his representative with the prospective buyer. Personal selling is the major promotional tool used to increase the sale by offering want satisfying products to the people.

2. Advertising: Advertising is an important form of promotion. It involves transmitting standard message to a large number of intended receivers. Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services of an identified sponsor. The message which is disseminated is known as advertisement.

3. Publicity: Publicity is any non-paid message of an organisation of its products in the news media. It is non-personal stimulation of demand for a product. By planting commercially significant news about it in a published medium or obtaining favourable presentation of it upon radio, television or stage that is non-paid for by the sponsor.

4. Sales promotion: Sales promotion includes all those activities, other than three discussed above, that stimulate consumer purchasing and dealer effectiveness. The examples of sales promotion are: distribttun of samples, coupons, premium on sales, trading displays, shows and exhibitions, holding contest, increase public relations, etc.

Question 7.
Define advertising. Give its objectives.
Answer:
Advertising: “Advertise” means to “describe” and “praise” in public medium to promote sales. It is, thus viewed as one of the finest tools of promotion mix that are used for directly persuading the target customers and public, at large to buy company’s products. It is defined as “any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor.”

It is used by not only business organisations but also by nonbusiness, non-profit organisations such as professional associates, social and charitable institutions, etc. Advertising is “organisations of ideas and the subsequent communication of these ideas with the purpose to motivate consumers along the path to purchase.”

Objective of advertising:
The fundamental purpose of advertising is to sell something, a product, a service or an ideas. In addition to this general objective, advertising is also used by the modem business enterprises for certain specific objective which are discussed below:

• To introduce a new product by creating interest for it among the prospective customers.
• To support personal selling programme. Advertising may be used to open customers doors for salesman.
• Enter a new market to attract a new group of customers.
• To fight competition in the market and to increase the sales.
• To enhance the goodwill of the enterprise by promising better quality products and service.
• To improve dealer relations. Advertising support the dealers in selling the product. Dealers are attracted towards a product which is advertised effectively.
• To warn the public against initiation of an enterprise’s product.

Question 8.
Give the functions of Advertising.
Answer:
The main functions of advertising are as follows:
1. Promotion of Sales: It promotes the sale of goods and services by informing and persuading the people to buy them. A good advertising campaign helps in winning new customers both in the national as well as in the international market

2. Introduction of New Product: It helps in introduction of new products in the market. A business enterprise can introduce itself and its product to the public through advertising. A new enterprise can’t make an impact on the prospective customers without the help of advertising.

3. Creation of good Public Image: it builds up the reputation of the advertiser. Advertising enables a business firm to communicate its achievement and its effort to satisfy the customers’ need to the public. This increase the goodwill and reputation of the firm is necessary to fight competition in the market.

4. Mass production: Advertising facilitates large scale production. Advertising encourages production of goods on large scale because the business firm knows that it will be able to sell on large scale with the help of advertising. Mass production reduces the cost of production per unit by making possible the economical use of various factors of production.

5. Research: Advertising stimulates research and development activities. Advertisement has become a competitive marketing activity. Every firm tries to differentiate its product from the substitutes available in the market through advertising. This compels every business firm to do more and more research to find new products and their new uses. If a firm does not engage in research and development activities, it will be out of the market in the near future.

6. Education to People: Advertising educates the people about new products and their uses. Advertising message about the utility of a product enables the people to widen their knowledge. It is advertising which has helped people in adopting new way of life and giving up all habits.

7. Support to Press: Advertisement serves as an important sources of revenue to the publishers of newspapers and magazines. It enables to increase the circulation of their publications by selling them at lower rates. People are also benefited because they get publications at cheaper rates. Advertising is also a source of revenue for TV network.

Question 9.
“Is advertising a social waste.” Comment.
Answer:
Many people feel that money spent on advertising goes waste. They criticise advertising as unnecessary activities and wasteful expenditure because:

1. Multiplication of Needs: Advertising multiples the need of the people by forcing or persuading them to buy them. Since advertising is continuously repeated, it creates a desire in the mind of the public to buy the advertised product. Sometimes, the product advertised is only a slight improvement over the existing product. When the people purchase the new one, they have to discard the old product.

2. Burden of customer: The amount spent by an advertiser on his products advertisement is added to the distribution cost of the product. Thus, the customer have to pay more for the product advertised. But it should also be remembered that advertising facilitates the large scale production which leads to reduction in the cost of production per unit.

3. Shifting of Demand: Advertising does not always increase the demand of the product. When the demand is inelastic, advertising shift demand from one producer to another. That means a large amount of money spend on advertising by all the manufactures goes waste.

4. Creation of Monopoly: Advertising may lead to monopoly of a brand. It is argued that big manufacturers who can afford large amount of money on advertising can create brand monopoly and eliminate the small producers But this monopoly is temporary only because other brands offer strong competition after sometime.

5. Wasteful expenditure: Advertising involves huge wasteful expenditure because a large number of advertisement either escape the attention of the people or are ignored by them.

Question 10.
Define a sales promotion along with its features.
Answer:
Sales promotion is an important method of promotion which has been developed in recent years to supplement and co-ordinate personnel selling and advertising efforts. According to American marketing association, Sales promotion includes those marketing activities, other than personal selling, advertising and publicity, that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and expositions, demonstrations and various non-recurrent selling efforts not in the ordinary routine, “Sales promotion includes free sample, premium on sale, sales and dealer incentives contesting, lair and exhibitions, public relations activities, etc.”

Features of Sales Promotion: The features of sales promotion are as follows:

• Communication: communicate useful information to consumers and gain their attention to buy company’s products.
• Incentives: They provide incentives in the form of concessions or inducements that are valued favorably by consumers and arollse desire in them to try those products.
• Invitation: it invites consumers to make immediate purchase. “Whereas advertising offers reasons to buy a product or service, sales, promotion covers reasons to buy now.”

Question 11.
Explain the rights and responsibilities of a consumer.
Answer:
The Consumer Protection Act, 1986 provides for six rights of consumers. The Consumer Protection councils set up under the act are intended to promote and protect the various rights of consumers.

1. Right to safety: The consumer has a right to be protected against goods and services which are manufactured with substandard products or do not conform to the safety norms might cause serious injury. Thus, consumers are educated that they should use electrical applicances which are ISI marked as this would be an assurance of such products meeting quality specifications.

2. Right to be informed: The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quantity, direction for use, etc. It is because of this reason that the legal framework in India requires the manufacturers to provide such information on the package and label of the product.

3. Right to choose: The consumer has the freedom to choose from a variety of products at competitive price. This implies that the marketers should offer a wide variety of product in terms of quality, brand, price size, etc., and allow the consumer to make a choice from amongst these.

4. Right to seek redressal: The consumer has a right to get relief in case the product or service fall short of his expectations. The Consumer protection Act provides a number of reliefs to the consumers including replacement of the product, removal of defect in the product, compensation paid for any loss or injury suffered by the consumer.

5. Right to be heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. It is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells.

6. Rights to consumer education: The consumer has a right to acquire knowledge and to be well-informed consumer throughout life. He should be aware of his right and the reliefs-available to him in case of a product or service falling short of his expectations.

Consumer Responsibilities: Although efforts have been made to protect the interest of consumers by both government and non-government organisations but exploitation of consumers will not be stopped till consumers come forward to safeguard their own interest first. Along with government and voluntary organisations, consumers have also to bear some responsibilities. Some such responsibilities are given below:

(i) Consumer must exercise his rights: These rights are rights to safety, right to be informed, right to choose, right to be heard, right to seek redressal and right to consumer education. Consumers must be aware of their own rights with regard to the products or services they buy from the markets.

(ii) Cautious consumers: Before purchasing, consumer must insist on getting foil information on the quality, quantity, utility, price, etc. of the goods or services. This will ensure a better purchase. He should not depend entirely on the seller.

(iii) Filing complaint for the redressal of genuine grievances: Sometimes, consumers ignore the deception of traders believing that the loss is small but this attitude encourages corrupt business practices to continue. On the other hand, some consumers also make excessive claims for compensation for small defect in goods which are not justified.

(iv) Consumer must be quality conscious: This is the only way to eradicate the problems of adulteration and spurious goods. While making purchases, consumers must look for standard quality certification marks like ISI, Agmark, FPO, Wolmark, etc.

(v) Advertisements often exaggerate: Do not be carried away by these. Consumers should compare the uses of the product given in the advertisement copy and the actual product. Any discrepancy should be brought to the notice of the sponsor of the advertisement.

(vi) Insist on cash memo: If there is any defect in the goods purchased and consumer has to make a complaint, the cash memo must be there as proof of purchase. A seller is bound to give a cash memo.

Consumers can be protected from exploitation if the consumer movement gets involved seriously. The educated consumers in society should also raise their voices and fight for the desired changes. Unless the consumers raise these issues, either through active participation in consumer organisations through other groups, the question of consumer right will only remain in textbook materials.

Question 12.
Define Stock Exchange. Discuss its functions.
Answer:
Stock exchange means an organized market where securities issued by companies, Government organization and semi-government organization are sold and purchased, securities include shares, debentures, bonds etc.

Definition of Stock Exchange:

1. According to Pyle, “Stock Exchange are market place where securities than have been listed thereon may be bought and sold for their investment or speculation.”
2. According to the securities contracts (Regulation) Act, 1956-Stock Exchange means any body of buying selling or dealing in securities.
3. According to Huband and Dockeray: Securities or stock exchanges are privately organized markets which are used to facilitate trading in securities.

Function of Stock Exchange: The main functions perfermed by stock exchange are as follows:
1. Providing Liquidity and Marketability to Existing securities: Stock exchange is a market place where market for sale and purchase of securities increase their marketability and enhance the liquidity.

2. Pricing of Securities: A stock exchange provided platform to deal in securities. The force of demand and supply work freely in the stock exchange. In this way, prices of securities are determined.

3. Safety of transaction: Stock exchanges are organized market. They fully protect the interest of investors. Each stock exchange has is own laws and bye-laws. Each members of stock exchange has to follow them and any members found violating them his membership is canceled.

4. Contributes to Economic Growth: Stock exchange provides liquidity to securities. This gives the investors a double benefit-first the benefit to the change in the market price of securities can be taken advantages of and secondary in case of need for money they can be sold at the existing market price at any time.

Question 13.
Explain the process of entrepreneurship.
Or, What role is played by entrepreneur while establishing an enterprise?
Or, Describe briefly the steps involved in starting a new business.
Answer:
The main process of entrepreneurship or role or functions of entrepreneur or the steps involved starting a new business are as follows:
1. Opportunity scouting: Entrepreneurial opportunities have to be actively searched for. One may rely on personal observation, discovery or invention, personal/professional contacts/networks and experience or may also help in identifying business opportunities. Alternatively, one may rely on published reports, surveys and the like, Narayan Reddy of vir chow Laboratories relied on the personal discovery of the molecule during his employment with a pharmaceutical company.

As observation means seeing/hearing/smeliing with a purpose, opportunity spotting pre-supposes tendency to look at the things and phenomenon from an entrepreneural mindset. Most of us have a consumer’s mindset. If we see any object of desire, may be a pen, laptop, latest model of the mobile phone or somebody eating pizza or burger, we crave to have the same thing for ourselves.

The entrepreneurial rond, on the other hand starts working out, what would be the market size, where to procure it from and at what price, will I be able to woo the customers from the existing players and how-by selling it cheaper, by providing more value or by better service and so on.

Entrepreneurial opportunities may also identified through a process of international, domestic, sectoral/industrial analysis.

For example, post WTO, international trade and investment have become freer of restrictions. Textile quotas are being phased out, and, there are greater, opportunities for textile and textile made-ups from India. Global outsourcing is on the rise ancl India offers a huge and varied pool of technical manpower that makes it a cost effective destination for in-bound global outsourcing in manufacturing as well as Information Techonology Enabled Services (ITES).

2. Identification of specific product offering: While the environment scan. leads to the discovery of more generalised business opportunities, there is a need to zero in on to a specific product of service idea. For example, trade liberalisation since WTO’s has resulted in export opportunities, but the question is what to export and where? A country-product matrix may be helpful in deciding.

This way we may arrive at the product-maket combination showing the fastest growing import and from our point of view export potential.

Deciding on the product offering makes the highest demand on the entrepreneur’s creativity and innovativeness. Yet, in a competitive environment, it is possible to differentiate one’s product offering even if the generic product is the same and serves the same need.

Clear decision on specific product offering necessitates decision on who is buying, why, and what are the value expectations. One will be able to succeed when the value delivered not only meets but also exceeds customers’, expectations and create a “vow” impact.

3. Feasibility Analysis: The product offering idea must be technically feasible, that is it should be possible with the available technology to convert the idea into a reality. And this should be possible at a cost that can be covered by the price it will fetch, in other words, the idea must be economically feasible too. The project cost should be within the resources available and the resource providers should be reasonably sure of an appropriate return on (profit) and return of (safety and liquidity) of their investments. That is, the idea must be financially viable as well.

There should be enough sales in the immediate and the prospect of growth in the foreseeable future, there should be adequate assurance on the commercial viability of the chosen product offering. Now-a-day, it is also important to be safe that there aren’t any environmental and other legal restrictions/necessity of prior approvals for setting up the business. It is also to be decided as to whether the business will be organised as a proprietory concern/partnership firm/company or cooperative entity.

Clearly the chosen product offering must be feasible from the diverse perspective. One must compile these findings in the form of a business plan that would have to be submited to the funding authorities, in the Indian context, the funding authorities, in the Indian context, the State finance Corporations. They may be having a prescribed proforma in which the details of the business plan are required to be furnished and, as such there may a need to adopt the contents accordingly.

The busines plan may be appraised by the funding institution and upon satisfying itself about the desirablity of assisting the project and upon furnishing the required margin money, banks may sanction the loan amount. Upon the project approval, the entrepreneur can proceed the project.

Question 14.
Discuss the various functions of management.
Answer:
The main functions of management are as follows:
1. Planning: Planning is the process of thinking before doing. Planning is always the first function. Planning bridges the gap between “where we stand today and where we want to reach”. It involves determinatin of goals as well as the activities required to be undertaken to achieve the goals. It is performed at all levels of management and in every organisation planning consists of deciding in advance.

Planning is a long process for the purpose of which following steps are taken:

• Setting objectives
• Developing premises
• Evaluating alternatives courses
• Identifying alternative courses of action
• Selecting an alternative
• Implementing the plan
• Follow-up-action.

2. Organising: Once the plans are in place, it is time to proceed with other phases of the project. The next step would be to establish an organisation structure setting up organisational structure mean deciding the framework of how many units and sub-units of departments are needed, how many parts or designations are needed in each department, how to distribute the authority and responsibility among different people.

Following steps are taken to determinate the organising functions of management:

• Assignment of duties
• Departmentalization
• Identification and division of work
• Establishing reporting relations.

3. Staffing: Staffing is the selection of employers who have the training and skill to meet the demands of each position. It aims at right man for the right job. It is the third step or function of a manager. It refers to recruiting, selecting appointing the employers, assigning them duties maintaining cordial relations and taking care of grievances of employees.

It also includes training and developing the employees, deciding their remuneration, promotion, increments, etc. evaluating the performance, maintaining personal records of employees.

4. Directing: After the plans are made, the organisation structure is established and the people hired, it is time to move ahead with the project. If the new venture is to be a success leadership is essential directing refers to giving directions or instructions to employers by motivating them, supervising the activities of employees, communicating with them.

5. Controlling: This is last function of manager. In this function managers try to match the actual performance with the planned performance and if there is no match between both of them managers try to find out the reasons of deviation and suggest corrective measures to come on the path of plan controlling functions refers to all the performance on the path of plan.

In the form of conclusion, controlling process has five main elements:

1. Setting of performance standards
2. Comparison of actual performance with standards
3. Measurement of actual performance
4. Analysing deviations
5. Taking corrective action.

Question 15.
What is marketing mix? What are its chief elements? Discuss.
Or, What do you mean by marketing-mix? Discuss its elements.
Or, What is marketing mix? Explain in brief its factions.
Answer:
Marketing-mix: Marketing-mix refers to the tools which the marketeer mixes in order to interact with a particular market.

Marketing-mix is the combination of different marketing decision- variables being used by a firm to market its goods and services. The environmental influences are uncontrollable elements whereas the ingredients of marketing-mix are controllable elements. The blend or combination of these ingredients constitutes the marketing-mix and this marketing-mix is expected to be in tune with the environmental influences. Following are the main definitions of marketing-mix given by some eminent experts:

1. “Marketing-mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market.” -Philip Kotler
2. “Marketing-mix is the term used to describe the combination of the four inputs which constitute the core of a company’s marketing system the product, the price structure, the promotional activities, and the distribution system.” -William J. Stanton
3. “The marketing mix is composed of a larger battery of advices which might be employed to include customers to buy a particular product.” -Keelery and Lazar
4. “The firm’s task is to find the best setting for its marketing decision variables. The setting constitute its Marketing-mix.” -Philip Kotler

The elements of marketing-mix are briefly discussed below:
1. Product: It involves planning, developing and producing the right type of products and services to be offered by the firm to the customers. It deals with the product range, durability, branding, packaging, colour and other features.

2. Price: The marketing manager should determine the price in such a way that, the firm is able to sell its products successfully. The price of the product must cover its cost of production and distribution and also a reasonable margin of profit. Pricing also involves establishing policies regarding credit and discount. The variables that vitally influence pricing are demand for the product in question, its cost, actual and potential competition and Government regulation, etc.

3. Promotion: It deals with informing the customers about the firm’s product and persuading them to purchase the same. It involves personal selling, advertising, publicity and sales promotion. Taken together, these elements constitute the promotion-mix of the firm. A brief description of the elements of promotion is given below:

(i) Personal Selling of Salesmanship: It includes activities both inside and outside the firm conducted on a person-to-person basis with the buyers. It involves oral presentation Of the product to prospective customers.

(ii) Advertising: It appeals to customers through impersonal media like radio, television, newspapers and magazines. Compared, with personal selling which involves personal contact with a customer, advertising is used to communicate simultaneously to a large number of people.

(iii) Publicity: Publicity may be defined as any form of non-paid significant news or editorial comment about ideas, products or institutions in the mass media like newspapers, radio and T.V. It appears primarily in the form of news stories and differs from advertising in that the latter is a paid medium of promotion.

(iv) Sales Promotion includes all promotional activities other than personal selling, advertising and publicity that are intended to increase sale of a product. The examples are distribution of samples, discount coupons, freebies, contests, window display, etc.

4. Place or Physical Distribution: Place in the context of marketing- mix refers to a set of decisions that need to be taken in order to make the product available to the customers for purchase and consumption. It involves physical handling and movement of goods from place of production to the place of consumption.

Question 16.
What do you mean by Functional Organisation? What are its characteristics?
Answer:
Functional Organisation functional authority occupies a position in between line and staff authority. It is a means of putting the specialists in top positions throughout the enterprise. It confers upon the holder a limited power of command over the people of other departments concerning their function. Functional authority remains confined to functional guidance of different departments.

Under functional organisation, various activities of the enterprise are Classified according to functions like production, marketing, finance, personnel, etc., and are put under the charge of functional specialists. A functional head directs the subordinates in his particular areas.

Characteristics of Functional Organisation:
The main characteristics of functional organisation are:

• In this organisation planning is separated from production.
• A number of specialists work together and all of them have authority over all the workers.
• Co-existence of two types of authority relationship line authority and functional authority.
• Functional organisation is based upon the principle of specialisation.
• In this organisation each worker receives orders and instructions from a group of specialists.
• Under this organisation every employee has a limited scope of work.

Advantages: The advantages of functional structure are:

• It is easier to organise departments based on functions and sub-functions.
• It gives balanced weightage to the basic functions on which the survival of a firm depends.

Question 17.
Explain the importance of organisation as a function of Management.
Answer:
Organising:
Once the plans are in place, it is time of proceed with other phases of the project. The next step would be to establish an organisation structure. Setting up organisational structure means deciding the framework of how many units and sub-units of departments are needed, how many posts or designations are needed in each department, how to distribute the authority and responsibility among different people.

Following steps are taken to determine the organising function of management:

• Assignment of duties
• Departmentalisation,
• Identification and division of work and
• Establishing reporting relations.

Question 18.
What are advantages of management?
Answer:
The advantages of management are follows:

• Helps in achieving objectives
• Provides effectiveness to human efforts
• Brings order to endeavors
• Critical ingredient in nation’s growth
• Provides judgment and vision
• Acts as balancing force
• Accomplishment of group goals
• Optimum utilisation of resources
• Maximum production at a minimum cost
• Efficient running of business
• Management helps in increasing competition
• Development of the nation
• Beneficial to both business as well as society.